Energy Transfer 2010 Annual Report Download - page 69

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Selling, General and Administrative. Selling, general and administrative expenses decreased in 2010 compared
to 2009 primarily due to lower employee-related costs and allocated overhead.
Midstream
Years Ended December 31,
2010 2009 Change
NGLs produced (Bbls/d) 51,144 46,640 4,504
Equity NGLs produced (Bbls/d) 19,301 17,355 1,946
Revenues $ 3,169,314 $ 2,441,160 $ 728,154
Cost of products sold 2,759,113 2,116,279 642,834
Gross margin 410,201 324,881 85,320
Operating expenses 78,964 68,989 9,975
Depreciation and amortization 85,942 70,845 15,097
Selling, general and administrative 18,339 44,315 (25,976)
Segment operating income $ 226,956 $ 140,732 $ 86,224
Volumes. NGL production increased during 2010 as compared to 2009 primarily due to increased inlet volumes
at our Godley processing plant as a result of more production by our customers in the North Texas area and
favorable processing conditions. These factors also contributed to an increase in our equity NGL volumes.
Gross Margin. The components of our midstream segment gross margin were as follows:
Years Ended December 31,
2010 2009 Change
Gathering and processing fee-based revenues $ 226,343 $ 169,814 $ 56,529
Non fee-based contracts and processing 204,078 141,061 63,017
Other (20,220) 14,006 (34,226)
Total gross margin $ 410,201 $ 324,881 $ 85,320
Midstream gross margin increased between the periods due to the net impact of the following:
•Gathering and processing fee-based revenues. Increased volumes in our North Texas system resulted in
increased fee-based margin of $24.1 million as compared with the same period last year. Additionally,
increased volumes resulting from our recent acquisitions and other growth capital expenditures located
in Louisiana and West Virginia provided an increase of $27.9 million in our margin for the year ended
December 31, 2010 as compared to the year ended December 31, 2009.
•Non fee-based contracts and processing margins. Non fee-based gross margin increased $63.0 million
primarily due to higher processing volumes at our Godley plant and more favorable NGL prices. Our
2010 composite NGL price of $1.02 per gallon increased $0.25 per gallon from $0.77 per gallon in
2009.
•Other midstream gross margin. As a result of our marketing activities, we recorded unrealized gains in
2009 of $8.7 million associated with transport capacity that was contracted with our intrastate
transportation and storage segment. In 2010, we recorded unrealized losses of $12.9 million associated
with our marketing activities that were partially offset by realized gains. For the years ended
December 31, 2010 and 2009, other midstream margin is net of $40.0 million and $60.7 million,
respectively, of fees charged by our intrastate transportation systems. These fees are recognized as
income by our intrastate transportation and storage segment and have no effect on our consolidated
results of operations.
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